Today Valve Software announced that the Xbox 360 version of its Source engine is being offered to developers. The Source engine debuted with Valve's own Half-Life 2 and has since been licensed for use in PC games like Dark Messiah of Might and Magic and SiN Episodes: Emergence.

Half-Life 2 is scheduled to be released on the Xbox 360 and PlayStation 3 in the first quarter of 2007, in a package that also includes the series' first two episodic content installments, as well as a pair of new games, Portal and Team Fortress 2.

[UPDATE] When asked if Valve was preparing to make the Source engine available as PS3 middleware, a representative of the company told GameSpot, "We're not currently working with Sony on PS3 middleware." While Valve is developing the Xbox 360 version of Half-Life 2 internally, is co-developing the PS3 version with an Electronic Arts studio.